Question from Stuart updated on 10th January 2014:
I was wondering what your opinion is on Queenstown apartments and short-term versus long-term rentals there? We are currently renting for $150 a week in a small rural area that we don't want to buy in. We have about $45,000 in savings that we are willing to commit and a surplus from income of roughly $250 a week. We are quite happy renting where we are but we want to get on to the property ladder. Queenstown appeals as we can visit when we feel the need to escape.
Our expert Ollie Mitch responded:
You should try to look at the numbers instead of the aspects of Queenstown that personally appeal to you as this could cloud your judgement when trying to make a smart decision. Looking at the numbers you will have a budget of $225,000 to keep within 80% LVR, an acceptable return to keep you cash flow positive is 7% net which equals $15,750 per annum after expenses. Assuming expenses of $4,000 per annum you need to gross $19,750 which is $395 pw for 50 weeks of the year. If you can find an apartment offering these numbers in Queenstown then I would say it's worth considering.Ollie Mitch is head of sales at Iconicity, leading apartment investment specialists and the largest private buyer and seller of apartments in Auckland City. Phone 09 300 5073, email email@example.com or visit www.iconicity.co.nz